Oil Firms Settle with Illinois Town for $8M in MTBE Suit

Officials in East Alton, Ill., have settled for $8 million from a group of oil companies for contaminating a water supply well.

The lawsuit alleged that the companies, which operated gas stations, refineries and chemical plants in the area, contaminated a well with the gasoline additive methyl tertiary butyl ether or MTBE.

In 1999, the village detected the contamination through the state's water quality monitoring program and stopped pumping water from the well. Mayor Fred Bright announced the settlement Wednesday, insisting that the contaminated water never reached the village's water plant.

For decades, MTBE has been used in gasoline to increase octane and reduce smog-causing emissions. It has been found to contaminate drinking water supplies when gasoline is spilled or leaks into surface or groundwater.

Even at low levels, MTBE can make water undrinkable because of a turpentine-like smell. EPA considers it to be a potential carcinogen, because, in high concentrations, it has been found to cause cancer in laboratory mice.

Tests across Illinois in 1999 showed MTBE in the water supplies of 25 communities, including East Alton. Since then, MTBE has been banned in Illinois.

The cleanup of the contaminated well has cost the village more than $500,000 so far, Bright said. The village will receive $5.33 million from the settlement, and the rest will go for legal fees.

Attorney Thomas Lakin said the village plans to place the money in certificates of deposit at a bank, then use the interest for any further cleanup costs.

The oil companies did not admit any wrongdoing in the settlement, and claims against two additional oil companies are pending, Lakin said.

One company involved in the settlement -- Shell Oil Products -- issued a statement Thursday saying it was ''pleased to have amicably resolved the litigation.''

Another company -- BP Products North America Inc. -- said that while it disagreed with the allegations, it felt the settlement was a fair resolution to the case, according to company spokesman Dan Cummings. ''In this case, we have achieved that end,'' he said.